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By:

Rashmi Kulkarni

23 March 2025 at 2:58:52 pm

Loss Aversion Is Why Your Good Idea Fails

Your upgrade is their loss until you prove otherwise. Last week, Rahul wrote about a simple truth: you’re not inheriting a business, you’re inheriting an equilibrium. This week, I want to talk about the most common reason that equilibrium fights back even when your idea is genuinely sensible. Here it is, in plain language: People don’t oppose improvement. They oppose loss disguised as improvement. When you step into a legacy MSME, most things are still manual, informal, relationship-driven....

Loss Aversion Is Why Your Good Idea Fails

Your upgrade is their loss until you prove otherwise. Last week, Rahul wrote about a simple truth: you’re not inheriting a business, you’re inheriting an equilibrium. This week, I want to talk about the most common reason that equilibrium fights back even when your idea is genuinely sensible. Here it is, in plain language: People don’t oppose improvement. They oppose loss disguised as improvement. When you step into a legacy MSME, most things are still manual, informal, relationship-driven. People have built their own ways of keeping work moving. It’s not perfect, but it’s familiar. When you introduce a new system, a new rule, a new “professional way,” you may be adding order but you’re also removing something  they were using to survive. And humans react more strongly to removals than additions. Behavioral economists Daniel Kahneman and Amos Tversky called this loss aversion where we feel losses more sharply than we feel gains. That’s why your promised “future benefit” struggles to compete with someone’s immediate fear. Which seat are you stepping into? Inherited seat:  People assume you’ll change things quickly to “prove yourself”. They brace for loss even before you speak. Hired seat:  People watch for hidden agendas: “New boss means new rules, new blame.” They protect themselves. Promoted seat:  Your peers worry the old friendship is now replaced by authority. They fear loss of comfort and access. Different seats, same emotion underneath: don’t take away what keeps me safe. Weighing Scale Think of an old kirana shop. The weighing scale may not be fancy, but it’s trusted. The shopkeeper has used it for years. Customers have seen it. Everyone has settled into that comfort. Now imagine someone walks in and says, “We’re upgrading your weighing scale. This is digital. More accurate. More modern.” Sounds good, right? But what does the shopkeeper hear ? “My customers might think the old scale was wrong.” (loss of trust) “I won’t be able to adjust for small realities.” (loss of flexibility) “If the digital scale shows something different, I’ll be accused.” (loss of safety) “This was my shop. Now someone else is deciding.” (loss of control) So even if the new scale is better, the shopkeeper will resist or accept it politely and quietly return to the old one when nobody is watching. That is exactly what happens in companies. Modernisation Pitch Most leaders pitch change like this: “We’ll become world-class.” “We’ll digitize.” “We’ll improve visibility.” “We’ll build a process-driven culture.” But for the listener, these are not benefits. These are threats, because they translate into losses: Visibility can mean exposure . Process can mean loss of discretion . Digitization can mean loss of speed  (at least initially). “Professional” can mean loss of status  for the old guard. So the person across the table is not debating your logic. They’re calculating their losses. Practical Way Watch what happens when you propose something simple like daily reporting. You say: “It’s just 10 minutes. Basic discipline.” They hear: “Daily reporting means daily scrutiny.” “If numbers dip, I will be questioned.” “If I show the truth, it will create conflict.” “If I don’t show the truth, I’ll be accused later.” In their mind, the safest response is: nod, agree, delay. Then you label them “resistant.” But they’re not resisting change. They’re resisting loss . Leader’s Job If you want adoption in an MSME, don’t sell modernization as “upgrade”. Sell it as protection . Instead of: “We need an ERP.” Try: “We need to stop money leakage and order confusion.” Instead of: “We need systems.” Try: “We need fewer customer escalations and less rework.” Instead of: “We need transparency.” Try: “We need fewer surprises at month-end.” This is not manipulation. This is translation. You’re speaking the language the system understands: risk, leakage, blame, customer loss, cash loss, fatigue. Field Test: Rewrite your pitch in loss-prevention language Pick one change you’re pushing this month. Now write two versions: Version A (your current pitch): What you normally say: upgrade, modern, efficiency, best practices. Version B (loss prevention pitch): Use this template: What are we losing today?  (money, time, customers, reputation, peace) Where is the leakage happening?  (handoffs, approvals, rework, vendor delays) What small protection will this change create? (fewer disputes, faster closure, less follow-up) What will not change?  (no layoffs, no humiliation, no sudden policing) What proof will we show in 2 weeks?  (one metric, one visible win) Now do one more important step: For your top 3 stakeholders, write the one loss they think they will face  if your change happens. Don’t argue with it. Just name it. Because once you name the fear, you can design around it. The close If you remember only one thing from this week, remember this: A “good idea” is not enough in a legacy MSME. People need to feel safe adopting it. You don’t have to dilute your standards. You just have to stop selling change like a TED talk and start selling it like a protection plan. Next week, we’ll deal with another invisible force that keeps companies stuck even when they agree with you: the status quo isn’t a baseline. It’s a competitor. (The writer is CEO of PPS Consulting, can be reached at rashmi@ppsconsulting.biz )

Reel Power, Real Stakes

Vijay’s swansong film has become a proxy war in Tamil Nadu’s fiercely-contested election.

Tamil Nadu
Tamil Nadu

With barley four months before Tamil Nadu goes to the polls, a film has managed to unsettle both the state’s entrenched rulers and the central government in Delhi. Jana Nayagan (“People’s Hero”), the final outing of the superstar-turned-politician Vijay, was meant to be a curtain call to a 30-year film career. It has instead turned into a full-blown constitutional melodrama, replete with a High Court stay, a censor-board rebellion and an extraordinary political pile-on.


The Madras High Court has blocked the film’s release until at least January 21, citing objections from the Central Board of Film Certification (CBFC) that certain scenes could threaten “national security.” For a production that reportedly cost Rs. 500 crore, with theatres booked and Rs. 50 crore in advance collections, the delay is financially ruinous. But the bigger casualty is political. Vijay, who has launched the Tamilaga Vettri Kazhagam (TVK) and declared his intention to become Chief Minister, had planned Jana Nayagan as a cinematic springboard into electoral politics.


In Tamil Nadu, cinema is the most potent political technology ever invented. The Dravidian movement mastered it in the 1950s and 1960s, turning films into ideological pamphlets and movie stars into mass leaders. M.G. Ramachandran and later Jayalalithaa rode celluloid stardom to the chief minister’s chair. Vijay’s gamble is that he can do the same in the age of social media and fragmented loyalties.


Jana Nayagan is explicitly designed for that purpose. The trailer presents Vijay as a crusader for fishermen, women and the poor, railing against corrupt institutions and entrenched elites. One line - “I have no intention of turning back. I am coming” - might as well be a campaign slogan. Songs and dialogues portray him less as a fictional hero than as a leader-in-waiting, a Tamil Nadu version of the anti-corruption crusaders who once electrified north India.


That is precisely why the film has become so sensitive. Its scheduled release clashed with Parasakthi, a film steeped in the iconography of the anti-Hindi agitations of the 1960s, the emotional bedrock of the ruling Dravida Munnetra Kazhagam (DMK). In that ideological turf, the DMK brooks no rivals. Matters were inflamed further by reports that Vijay had bypassed Red Giant Movies, the DMK-linked distribution powerhouse run by the party’s first family, to release Jana Nayagan independently. In Tamil cinema, this is tantamount to a declaration of political war.


After a single judge cleared the film, the CBFC appealed, citing unremoved scenes that allegedly imperil national security. A division bench stayed the release. The optics were combustible. Chief Minister M.K. Stalin accused the BJP-led Union government of turning the censor board into yet another instrument of political intimidation, alongside the CBI and Enforcement Directorate. For once, the DMK found itself defending a rival if only to keep the Centre at bay.


The BJP, for its part, has been scrupulously silent, letting the CBFC do the talking. Congress leaders jumped in to back Vijay, triggering an awkward spat within the INDIA alliance. Some DMK figures accused Delhi of trying to nudge Vijay into the BJP’s National Democratic Alliance. Others saw the Centre using regulatory levers to unsettle regional power bases.


Tamil Nadu is a geopolitical outlier within India. It has resisted Hindi imposition, kept the BJP at bay and cultivated a distinct Dravidian identity. Delhi’s attempts to expand its footprint through culture, cinema or celebrity politicians have largely failed. Vijay’s rise threatens to scramble that equation. Unlike earlier film stars, he is positioning himself not as a DMK offshoot but as an anti-establishment insurgent, attacking both the ruling party in Chennai and the BJP in Delhi.


That makes him uniquely dangerous. For the DMK, he risks peeling away young and first-time voters disillusioned with incumbency. For the BJP, he offers a charismatic alternative to a party that has never cracked Tamil Nadu’s emotional code. For Delhi’s mandarins, a Vijay-led government would be another assertive regional actor complicating Centre–state relations.

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